Armed Groups In Libya Are Selling The Oil They Seized

A member of the Libyan
army's Thunderbolt Brigade flies the Libyan flag as the army
prepares for deployment in Benghazi, November 8, 2013.REUTERS/Esam Omran
Al-Fetori

TRIPOLI/LONDON (Reuters) - Armed groups demanding autonomy
for eastern Libya have invited foreign companies to buy
oil from ports they have seized in defiance of the central
government in Tripoli.

In an announcement on Tuesday, they also pledged to protect
tankers loading crude, after the Libyan defense
ministry said it would destroy vessels using ports in the
east, which are under control of the protesters linked to a
self-proclaimed regional government.

The development adds to an air of chaos as the weak Tripoli
government struggles to rein in the armed groups that helped
oust Muammar Gaddafi in 2011 but which kept their guns and are
now demanding political power and a bigger share of the country's
oil wealth.

The conflict is hurting oil revenues, which fund the OPEC
nation's government and the import of wheat and other staple
foods. The government has warned it will be unable to pay public
salaries if the standoff continues.

On Monday, the Libyan navy said it fired warning shots
at a tanker trying to load oil at the eastern port of
Es-Sider, which was seized with two other terminals by the
autonomy group in August. The three harbors accounted previously
for 600,000 barrels a day.

But the group, led by tribal leader and 2011 civil war
hero Ibrahim Jathran, shrugged off Tripoli's warning by
inviting foreign companies to buy eastern oil.

OIL COMPANIES

"We welcome global oil companies ... The oil security guards will
guarantee the safety of tankers," said Abd-Rabbo al-Barassi,
prime minister of Jathran's self-declared government in the
eastern Cyrenaica region.

Workers at the seized ports had returned to work, he said. A
newly founded oil company called Libya Oil and Gas
Corp would be dealing with potential buyers. A new army and
coast guard, made up of Jathran's battle-hardened fighters,
would secure the ports.

Barassi said his group had nothing to do with the tanker shot at
by a Libyan navy vessel on Sunday on its way to
Es-Sider. Tripoli has said the tanker was intending to
load oil at the seized port, but Barassi said this was a "lie."

The confrontation has raised worries that Libya, also
struggling with Islamist militias and armed tribesmen, might
break apart as Cyrenaica and the southern Fezzan region demand
political autonomy.

But Barassi said in a television broadcast that his group had no
plans to secede.

He also invited Tripoli to send a delegation to help
oversee oil sales. "We assure all Libyans that the sale of oil
will be according to the law."

The group is campaigning for a federal state sharing power and
oil wealth between Cyrenaica, Tripolitania in the west, and
Fezzan, as was the case in the kingdom that preceded Gaddafi's
rule. Oil sales were then shared between the regions.

STANDOFF

Libya's defense ministry had earlier warned potential
buyers against any docking at the seized ports. "If a ship docks
in one of the closed ports, and it does not leave the port again,
then we will destroy it," said Defense
Ministry spokesman Said Abdul Razig al-Shbahi.

Tribal leaders have sought to negotiate on behalf of the
government with the group holding the ports. Those negotiations
to have gone nowhere despite pressure from tribal leaders, some
of whom look down on Jathran as a warlord leading the
country into chaos.

The risks of an escalation were clear over the weekend when
the Libyan navy said it opened fire on a vessel trying
to reach Es-Sider before the tanker, Baku, turned back
to Malta.

The owner of the tanker said on Tuesday the vessel had been in
international waters and denied it was involved in trying to
smuggle crude oil.

The owner, Palmali, said a Libyan naval vessel fired warning
shots even after it provided written confirmation to
the Libyan National Oil Company (NOC) that it was no
longer sailing to Es-Sider.

TRIBESMEN PROTEST

While negotiations with Jathran have failed, they
worked elsewhere: Output at the southern
government-controlled El Sharara oilfield rose further
on Tuesday to over two-thirds of full capacity and a pipeline
shipping condensate - very light crude - to a western port
reopened.

Talks had ended a protest by tribesmen at El Sharara with
production there climbing to 277,000 bpd on Tuesday and expected
to reach full capacity of 340,000 bpd by Wednesday. Libya's
output was over 1 million bpd in July before the strikes started.

"I think if we keep up at this level we will reach capacity by
tomorrow," NOC spokesman, Mohamed al-Harari, said.

Protesters, who had blockaded the El Sharara field for two
months, had been calling for the establishment of a local council
and the granting of national identity cards for tribesmen from
the Tuareg minority.

The pipeline carrying condensates from Wafa
oilfield to Mellitah port, jointly operated
by Italy's ENI in the west, has also been reopened after
protesters briefly blocked the line, with output now at around
30,000 bpd, the NOC said.